Capitalism’s Unclear Futures

Abstract

The authors of the present article pose and consider in detail the highly relevant issue of whether capitalism has a future or whether it will be replaced by some new system. And if it does have a future, then what future will it be? These questions are nothing new, but in the recent few years, just like a hundred years ago, they have acquired exceptional importance, since not only the Left but also the representatives of the largest financial capital started speaking about the end of capitalism. The present article considers the following aspects: what is capitalism as an economic sector and as an economic system? How did capitalism evolve? What are its potentialities? The authors also make some forecasts for the next 50–100 years. Various scenarios for the future of capitalism are considered: from maintaining its leading role to its reduction to a sector. It is assumed that in the coming decades, the development of capitalism may proceed in different ways in developed and developing countries, which may result in a complex continuum of types, transitions, combinations, and forms of capitalism. In some countries, the development of capitalism has reached a level when it has already exhausted itself and needs transformations; meanwhile, there are countries where full-fledged market relations have not yet emerged. The authors analyze two main types of capitalism. The developed countries are likely to experience a shift toward strengthening of distributive institutions. In their turn, the developing countries that continue the processes of economic and socio-political modernization are likely to proceed toward strengthening of capitalist market institutions, though with some important restrictions preventing exploitation and environmental degradation. The authors believe that capitalism will be inevitably transformed in one way or another, but such transformations can vary greatly.

Keywords:

• Capitalism
• developed countries
• developing countries
• forecasting
• futures
• inequality
• profit
• remote work
• sector
• socialism
• system
• zero-sum game

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 However, one should note that the Marxists—and Wallerstein belonged to the Marxists—began to convince everyone of the near end of capitalism already when capitalism was just emerging as a system. And they have been burying capitalism continuously for more than 170 years, which, of course, gives reason to treat just another Marxist forecast of the imminent end of capitalism with a large dose of scepticism.

2 Thus, Mann believes that a one-percent growth rate should not be considered a crisis of capitalism, since, earlier (in the 18th century), such a growth rate was normal (Mann, 2013). This is true, but that percent was supported by stable prices, gold money, and no help from central banks, so those percentages should not be equated with the current, ‘wound up’ ones.

3 Yet, Mann must be given credit for saying that while this transition to a low-emissions regime will reduce growth in the short term, it is likely to boost growth thereafter (Mann, 2013).

4 Thus, Randal Collins predicts that capitalism will most likely be replaced by socialism. It implies state ownership or tight control over sources of profit, centralized planning, and redistribution. The pursuit for profit should be replaced by concern for the broad masses of the population. Actually, Collins realises that socialism has many shortcomings; therefore, he considers it possible that later—in 50 years—socialism may again be replaced by some form of capitalism (Collins et al., 2013).

5 Let us point out that representatives of the opposite camp (libertarians, the Austrian school of economics) associate the problems of modern capitalism precisely with excessive state regulation, and they pin hopes for a better future on a return to classical capitalism (Rotbard, 2005).

6 For our analysis of the report to the Club of Rome, see Grinin (2021). Regarding the book by Schwab and Malleret there are a lot of interesting publications in Russian (see, e.g., Fursov, 2021; Katasonov, 2021).

7 Although the GDP indicator is often subjected to generally fair criticism (see Costanza et al., 2014; Easterlin, 2010; Goldsmith, 2019; Kapoor & Debroy, 2019; McElwee & Daly, 2014), in this case the criticism is intended to hide the fact that the potential of developed countries has weakened, as well as to cast doubt on the need for economic growth in general; however, the rejection of growth as a goal objectively leads to the stagnation of society (for details see Grinin & Grinin, 2021).

8 For example, the Spanish port of Cadiz for a long time used to be the only port that had the right to trade with Spanish America.

9 It is obvious that the Industrial Revolution could not start in the old wool industry, protected by laws and monopolies, because of the conservatism of its organization (Sheypak, 2009; Tseytlin, 1940).

10 One should keep in mind that regulation was often aimed at preserving the quality of products, limiting exploitation and competition, while young capitalism neglected quality, strived for quantity, and was ready to use super-exploitation, so that cheap goods (although often of low quality) could easily ruin craftsmen.

11 In connection with the governmental support for farmers, such regulation manifested perhaps most vividly in agriculture.

12 For more detail on the impact of technological progress on the development of capitalism, see Grinin and Korotayev (2010). As for the impact of technological progress on the future of capitalism, the topic requires special study, especially since the impact of technological progress on the fate of capitalism seems ambiguous: on the one hand, it opens up new opportunities for capitalism, and on the other hand, the level of socialization of the means of production, communications etc. becomes so global that it cannot but require regulation, and this affects the reduction of the field of capitalism.

13 However, one should not forget about the exploitation of colonies; yet, in the second half of the twentieth century, colonies became independent, while capitalism developed very actively. We should also note that in China at the end of the 20th—in the 21st century, the development actually followed the same pattern: from very hard exploitation and meagre wages to the current more or less acceptable level. But still, there remain spheres where exploitation is above the average, so attempts to increase exploitation are always possible and sometimes turn out to be rather successful. However, in developed countries today, in addition to the described regulations, there is also felt a shortage of labor, which also greatly hinders the possible exploitation, sometimes even more than any restrictions.

14 However, according to current forecasts, the population growth in many African countries will not stop even by the end of this century, although it will noticeably decrease.

15 However, it is possible that the development of industrial robots may be delayed by Africa, which has a chance to turn into a new workshop of the world, to some extent repeating the path of China. But this is a very complex issue that requires serious study, given the large civilizational discrepancy between China and Africa (cf. Grinin & Korotayev, 2016).

16 We should note that Jorgen Randers, who is not too sympathetic to capitalism, also takes a rather cautious position on the future of capitalism. In his answer to the question about the end of capitalism, he remarks: “No, I don’t think so, despite my desire to modify “pure” capitalism by regulating and internalizing external costs. Unfortunately, the Democratic majority will never agree to high enough carbon taxes to cut emissions, nor rules to ban gas consumption or air travel for business and tourism. There will be some changes, but not enough to call it the end of capitalism” (Randers, 2012, p. 10).

17 M_e—is a money equivalent, that is shares, loan stocks, etc.

18 But on this developmental path, in certain countries, capitalism runs the risk of coming to dead-ends that cannot be resolved on the basis of preserving its basic characteristics and relying on its inherent socio-political institutions. In this regard, we do NOT exclude revolutions and revolutionary events even in developed countries (see, e.g., Goldstone et al., 2022; Grinin & Korotayev, 2022; Korotayev et al., 2022; Zhdanov & Korotayev, 2022).

Additional information

Funding

This research was performed with support by the Russian Science Foundation (Project No. 23-11-00160).